__________________________________________________________________
___________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
Annual Report Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
(Mark One)
(X) Annual Report pursuant to Section 15(d) of the Securities
Exchange Act of 1934 (No fee required, effective October 7,
1996)
For Year Ended: January 31, 1998
( ) Transition Report Pursuant to Section 15(d) of the Securities
Exchange Act of 1934 (No fee required) For the transition
period from ___________________ to __________________
Commission File Number: 333-27813
A. Full title of plan and the address of the plan, if different
from that of the issuer named below:
Saks Fifth Avenue Retirement Savings Plan
B. Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office:
Saks Incorporated
750 Lakeshore Drive, Birmingham, AL 35211
_________________________________________________________________
__________________________________________________________________
SIGNATURES
The Plan. Pursuant to the requirements of the Securities
Exchange Act of 1934, the trustees (or other persons who
administer the employee benefit plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly
authorized.
Saks Fith Avenue Retirement
Savings Plan
______________________________
(Name of Plan)
Dated: June 29, 1999 By: /s/ Douglas E. Coltharp
_________________________
Douglas E. Coltharp
Executive Vice President
and Chief Financial
Officer
EXHIBIT INDEX
Exhibit Number Description of Document Page
23 Consent of Independent Accountants
Saks Fifth Avenue Retirement Savings Plan
Financial Statements
for the years ended December 31, 1998 and 1997
Saks Fifth Avenue Retirement Savings Plan
Table of Contents Page
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits, with
Fund Information, as of December 31, 1998 2
Statement of Net Assets Available for Benefits, with
Fund Information, as of December 31, 1997 3
Statement of Changes in Net Assets Available for Benefits,
with Fund Information, for the year ended December 31,
1998 4
Notes to Financial Statements 5-12
Supplemental Schedules:
*Item 27a - Schedule of Assets Held for Investment
Purposes as of December 31, 1998 13
*Item 27d - Schedule of Reportable Transactions for
the year ended December 31, 1998 14-15
*Refers to item number in Form 5500 (Annual Return/Report
of Employee Benefit Plan)for the plan year ended September
30, 1998.
REPORT of INDEPENDENT ACCOUNTANTS
To the Plan Asset Committee
of the Saks Fifth Avenue Retirement Savings Plan:
In our opinion, the accompanying financial statements present
fairly, in all material respects, the net assets available for plan
benefits of the Saks Fifth Avenue Retirement Savings Plan (the
"Plan") as of December 31, 1998 and 1997, and the changes in net
assets available for plan benefits for the year ended December 31,
1998, in conformity with generally accepted accounting principles.
These financial statements are the responsibility of the Plan's
management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits
of these statements in accordance with generally accepted auditing
standards which require that we plan and perform the audits to
obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in
the financial statements, assessing the accounting principles used
and significant estimates made by management, and evaluating the
overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audit of the Plan's financial statements as of and for the year
ended December 31, 1998, was made for the purpose of forming an
opinion on the financial statements taken as a whole. The
supplemental schedules, as listed on the accompanying index, are
presented for the purpose of additional analysis and are not a
required part of the basic financial statements, but are
supplementary information required by the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the
Employee Retirement Income Security Act of 1974. These supplemental
schedules are the responsibility of the Plan's management. The fund
information in the statement of net assets available for benefits
and the statement of changes in net assets available for benefits
is presented for purposes of additional analysis rather than to
present the net assets available for benefits and changes in net
assets available for benefits of each fund. The supplemental
schedules and fund information have been subjected to the auditing
procedures applied in the audit of the basic financial statements
for the year ended December 31, 1998, and, in our opinion, are
fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
The schedule of reportable transactions that accompanies the Plan's
financial statements does not disclose the historical cost of
certain plan investments sold during the plan year. Disclosure of
this information is required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974.
PricewaterhouseCoopers LLP
Birmingham, Alabama
June 25, 1999
Saks Fifth Avenue Retirement Savings Plan
Statement of Net Assets Available for Benefits, with Fund
Information
as of December 31, 1998
<TABLE>
Asset Asset
Interest U.S. Participant Asset Manager- Manager -
Income Equity Loan Balanced Magellan Manager Growth Income
Fund Index Fund Fund Fund Fund Fund Fund Fund
-------- -------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Participant directed
investments in
accounts established
by Fidelity Management
Trust Company,
at fair value $54,010,239 $36,284,449 $10,397,212 $35,396,506 $8,748,543 $14,022,977 $3,281,614
Receivables:
Participant loans $6,827,516
Contributions 86,351 92,878 34,573 127,683 21,483 43,416 12,502
Other (57,018) 31,644 2,829 55,263 766 3,432 1,184
---------- ---------- ---------- ---------- ----------- ---------- ----------- ----------
Total assets 54,039,572 36,408,971 6,827,516 10,434,614 35,579,452 8,770,792 14,069,825 3,295,300
---------- ---------- ---------- ---------- ----------- ---------- ----------- ----------
LIABILITIES
Administrative
expenses payable (3,746) 5,506 5,126 3,721 2,773 2,018 3,442
---------- ---------- ---------- ---------- ----------- ---------- ----------- ----------
Net assets available
for benefits $54,043,318 $36,403,465 $6,827,516 $10,429,488 $35,575,731 $8,768,019 $14,067,807 $3,291,858
========== =========== ========== =========== =========== ========== =========== ==========
</TABLE>
<TABLE>
Saks PIMCO Low
Incorporated Growth Total Priced
Stock & Income OverseasReturn Bond Stock
Fund Contrafund Fund Fund Fund Fund Total
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Participant directed
investments in acc-
ounts established
by Fidelity Management
Trust Company, at
fair value $851,341 $4,587,479 $7,675,398 $1,392,478 $431,348 $263,502 $177,343,086
Receivables:
Participant loans 6,827,516
Contributions 10,541 37,551 72,501 16,044 7,910 8,903 572,336
Other (3,680) 10,484 5,221 9,817 (4,977) 289 55,254
---------- ---------- ---------- ---------- ---------- --------- ----------
Total assets 858,202 4,635,514 7,753,120 1,418,339 434,281 272,694 184,798,192
---------- ---------- ---------- ---------- ---------- --------- ----------
LIABILITIES
Administrative
expenses payable 101 1,108 6,806 148 947 105 28,055
---------- ---------- ---------- ---------- ---------- --------- ----------
Net assets available
for benefits $858,101 $4,634,406 $7,746,314 $1,418,191 $433,334 $272,589 $184,770,137
========== ========== ========== ========== ========= ======== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Saks Fifth Avenue Retirement Savings Plan
Statement of Net Assets Available for Benefits, with Fund Information
as of December 31, 1997
<TABLE>
Asset
Interest U.S. Participant Asset Manager-
Income Equity Loan Balanced Magellan Manager Growth
Fund Index Fund Fund Fund Fund Fund Fund
--------- ----------- ---------- ---------- ----------- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Participant directed
investments in acc-
ounts established by
Fidelity Management
Trust Company, at
fair value $50,707,104 $27,507,535 $8,042,212 $24,152,973 $8,158,574 $11,635,824
Receivables:
Participant loans $5,878,480
Contributions 105,476 47,465 24,588 58,508 19,664 30,823
Other 24,499 9,134 2,510 9,720 2,589 4,006
---------- ---------- ---------- ---------- ---------- ---------- ----------
Total assets 50,837,079 27,564,134 5,878,480 8,069,310 24,221,201 8,180,827 11,670,653
---------- ---------- ---------- ---------- ---------- ---------- ----------
LIABILITIES
Administrative
expenses payable 28,268 4,771 3,543 3,116 2,815 2,608
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net assets available
for benefits $50,808,811 $27,559,363 $5,878,480 $8,065,767 $24,218,085 $8,178,012 $11,668,045
========== ========== ========== ========== ========== ========== ==========
</TABLE>
<TABLE>
Asset Saks
Manager-Incorporated Growth &
Income Stock Income Overseas
Fund Fund Contrafund Fund Fund Total
ASSETS -------- -------- --------- -------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Participant directed
investments in acc-
ounts established by
Fidelity Management
Trust Company, at
fair value $2,666,316 $362,982 $2,224,323 $3,037,373 $753,889 $139,249,105
Receivables:
Participant loans 5,878,480
Contributions 11,658 1,996 10,313 14,159 4,335 328,985
Other 1,253 60 1,328 1,092 276 56,467
---------- ---------- ---------- ---------- ---------- ----------
Total assets 2,679,227 365,038 2,235,964 3,052,624 758,500 145,513,037
---------- ---------- ---------- ---------- ---------- ----------
LIABILITIES
Administrative
expeneses payable 2,597 31 488 2,277 86 50,600
---------- ---------- ---------- ---------- ---------- ----------
Net assets available
for benefits $2,676,630 $365,007 $2,235,476 $3,050,347 $758,414 $145,462,437
========== ========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Saks Fifth Avenue Retirement Savings Plan
Statement of Changes in Net Assets Available for Benefits, with Fund Information
as of December 31, 1998
<TABLE>
Asset Asset
Interest U.S. Participant Asset Manager Manager
Income Equitity Loan Balanced Magellan Manager Growth Income
Fund Index Fund Fund Fund Fund Fund Fund Fund
-------- --------- --------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Net appreciation
(depreciation) in
the fair value of
investments $7,210,450 $710,081 $7,014,179 $(340,933) $199,943 $29,297
Interest income $3,183,861 705,197 990,165 1,582,926 1,589,061 1,942,335 260,315
Dividend income 112,957 24,073 115,799 31,613 47,307 10,948
Participant contri-
butions 4,257,738 3,502,613 1,339,354 4,172,362 956,883 1,875,552 559,483
Employer contri-
butions 704,093 547,326 215,849 679,650 165,321 304,956 90,776
---------- ---------- ---------- ---------- ----------- --------- ---------- -------
8,145,692 12,078,543 3,279,522 13,564,916 2,401,945 4,370,093 950,819
Deductions from net
assets attributed to:
Benefit and with-
drawal payments 4,867,905 2,471,424 $390,313 636,538 1,735,025 788,840 852,012 140,639
Administrative
expenses 155,515 31,078 28,509 19,592 16,965 13,921 19,751
---------- ---------- ---------- --------- ---------- --------- ----------- --------
3,122,272 9,576,041 (390,313) 2,614,475 11,810,299 1,596,140 3,504,160 790,429
Interfund transfers,
net 112,235 (731,939) 1,339,349 (250,754) (452,653) (1,006,133) (1,104,398) (175,201)
---------- ---------- ---------- ---------- ----------- ---------- ---------- ---------
Net increase 3,234,507 8,844,102 949,036 2,363,721 11,357,646 590,007 2,399,762 615,228
Net assets available
for benefits, be-
ginning of year 50,808,811 27,559,363 5,878,480 8,065,767 24,218,085 8,178,012 11,668,045 2,676,630
---------- ---------- --------- --------- ---------- --------- ---------- ----------
Net assets available
for benefits, end
of year $54,043,318 $36,403,465 $6,827,516 $10,429,488 $35,575,731 $8,768,019 $14,067,807 $3,291,858
=========== =========== ========== =========== =========== ========== =========== ==========
</TABLE>
<TABLE>
Saks PIMCO Low
Incorporated Growth & Total Priced
Stock Income Overseas Return Bond Stock
Fund Contrafund Fund Fund Fund Fund Total
------- --------- --------- --------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Additions to net assets
attributed to:
Net appreciation
(depreciation) in
the fair value of
investments $138,947 $586,037 $993,013 $81,573 $(13,023) $11,474 $16,621,038
Interest income 336,931 344,025 26,706 22,604 6,238 10,990,364
Dividend income 3,244 18,727 32,226 6,718 2,058 2,142 407,812
Participant contri-
butions 287,298 1,065,814 1,891,244 461,576 164,216 168,670 20,702,803
Employer contri-
butions 46,868 157,652 297,252 74,216 22,449 26,815 3,333,223
------------------- ---------- --------- --------- ---------- -----------
476,357 2,165,161 3,557,760 650,789 198,304 215,339 52,055,240
Deductions from net
assets attributed to:
Benefit and withdrawal
payments 30,257 225,042 190,485 86,458 1,802 2,907 12,419,647
Administrative
expenses 413 5,343 32,249 696 3,053 808 327,893
------------------- ---------- --------- --------- ---------- -----------
445,687 1,934,776 3,335,026 563,635 193,449 211,624 39,307,700
Interfund transfers,
net 47,407 464,154 1,360,941 96,142 239,885 60,965
------------------- ---------- --------- --------- ---------- -----------
Net increase 493,094 2,398,930 4,695,967 659,777 433,334 272,589 39,307,700
Net assets available
for benefits, be-
ginning of year 365,007 2,235,476 3,050,347 758,414 145,462,437
------------------- ---------- --------- --------- ---------- -----------
Net assets available
for benefits, end
of year $858,101$4,634,406 $7,746,314$1,418,191 $433,334 $272,589$184,770,137
=================== ============================== ======================
</TABLE>
The accompanying notes are an integral part of these financial statements.
Saks Fifth Avenue Retirement Savings Plan
Notes to Financial Statements
1. Description of the Plan
The following brief description of the Saks Fifth Avenue Retirement
Savings Plan (the "Plan") is provided for general information purposes
only. Participants should refer to the Plan document for a more complete
description.
General - The Plan is a defined contribution plan covering substantially
all employees of the Saks Fifth Avenue division of Saks Incorporated and
subsidiaries (collectively, the "Company"). The Plan is subject to the
provisions of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA").
Investment Options - Investment options may be changed, added or deleted
from the Plan at the election of the Plan Asset Committee (the
"Committee"). During 1998, two additional options were added to the Plan:
the PIMCO Total Return Bond Fund and the Low-Priced Stock Fund.
On September 17, 1998, the former parent company of Saks Fifth Avenue
merged with and into a wholly owned subsidiary of Proffitt's, Inc. In
connection with the merger, Proffitt's, Inc. changed its corporate name to
Saks Incorporated. Accordingly, all shares of Saks Fifth Avenue stock held
by the Plan in the Saks Fifth Avenue Stock Fund were converted to Saks
Incorporated common stock during the current year.
Participants may elect to invest their contributions in any one or a
combination of the following investment options: the Interest Income Fund,
the U.S. Equity Index Fund, the Balanced Fund, the Magellan Fund, the
Asset Manager Fund, the Asset Manager-Growth Fund, the Asset
Manager-Income Fund, the Saks Incorporated Stock Fund, the Contrafund, the
Growth & Income Fund, the Overseas Fund, the PIMCO Total Return Bond Fund,
and the Low-Priced Stock Fund. The Interest Income Fund is invested in
individual guaranteed investment contracts ("GICs"), an open-end
commingled pool of investment contracts (Managed Income Portfolio II),
individual asset-backed investment contracts and short-term investments.
The U.S. Equity Index Fund is invested primarily in equity securities in
a wide range of companies. The Balanced Fund is invested in a diversified
portfolio of fixed income and equity securities. The Magellan Fund invests
in equity securities, and securities convertible to equity. The Asset
Manager, Asset Manager-Growth, and Asset Manager-Income Funds all invest,
to differing degrees, in domestic and foreign equities, fixed income and
short-term instruments. The Saks Incorporated Stock Fund invests in Saks
Incorporated common stock and is measured in units of participation rather
than in shares of Saks Incorporated common stock. The Contrafund and the
Low-Priced Stock Fund are growth funds that invest mainly in equity
securities of companies where value is not fully recognized by the public.
The Growth & Income Fund is invested in equity securities that combine
current income and capital appreciation. The Overseas Fund is invested
primarily in the equity securities of companies whose principal activities
are outside of the United States.
The PIMCO Total Return Bond Fund invests in various types of bonds,
including U.S. Government, corporate, mortgage, and foreign.
Plan Administrator and Trustee - The Plan is sponsored by the Company and
administered on a day-to-day basis by the plan administrator, who was
appointed by the Board of Directors of the Company. The Committee,
appointed by the Board of Directors of the Company, was established to
oversee the investment of plan assets. The Fidelity Management Trust
Company ("the Trustee") was appointed by the Committee and acts as
Trustee, recordkeeper and investment manager of the Plan at the direction
of the Committee.
Eligibility - Generally, an employee, subject to certain exceptions, may
elect to participate in the Plan after completing 12 months of employment,
during which time he or she has at least 1,000 hours of service and has
attained age 21.
Contributions - Participants may elect for regular payroll deductions,
ranging from 1% to a maximum of 16% of compensation, as defined, to be
contributed to the Plan on a before- or after-tax basis, or both. No
participant shall be permitted to elect before-tax contributions under the
Plan during any calendar year in excess of the amount prescribed by the
Secretary of the Treasury under the Internal Revenue Code (the "Code")
($10,000 for 1998). Participants may also contribute amounts representing
distributions from other qualified defined benefit or contribution plans
("rollover contributions") provided such contributions meet the
requirements of the Plan document.
Company matching contributions must comply with applicable provisions of
the Code and are remitted to the Trustee after each pay period. During
1997, the Company's matching contribution rate was 25% of the first 6% of
compensation contributed to the Plan by a participant. Effective April 1,
1998, the Company's Board of Directors increased the matching rate to 28%
of the first 6% of compensation contributed to the plan by a participant.
Matching contribution rates for plan years 1999 and 2000 will be 31% and
33% of the first 6% of compensation contributed to the plan by a
participant, respectively.
At December 31, 1998 and 1997, contributions receivable consisted of
participant contributions of $480,292 and $282,482, respectively, and a
Company matching contribution of $92,044 and $46,503, respectively.
Participant Accounts - Participants may elect to invest in one or more of
the thirteen investment options in 1% increments. The contribution rate,
investment mix and contribution allocation can be changed by the
participant on any business day. Transfers of existing investments between
funds is also permissible upon election. The net investment gain or loss
for each of the investment funds is allocated daily to each participant's
elective and matching accounts in the proportion which each account bears
to the total of each corresponding fund.
Payment of Benefits - Generally, a participant is entitled to his or her
daily total account balance coincident with or immediately following age
65. Additionally, a participant is entitled to the full value of his or
her account as of the valuation date coincident with or immediately
following disability.
Upon the death of a participant, the beneficiary will receive the full
value of his or her account as of the valuation date coincident with or
immediately following the date of death. Benefits are recorded when paid.
Vesting - The Company matching account vests according to the following
schedule:
Years of Vesting Service Percent Vested
-------------------------- ----------------
Less than 2 years 0%
2 but less than 3 25%
3 but less than 4 50%
4 but less than 5 75%
5 years or more 100%
Employee contributions, including rollover contributions, are always fully
vested.
Forfeitures - Participants who terminate employment, but have not become
fully vested, forfeit the unvested balances in their accounts. In
accordance with the Plan document, the forfeiture amount is applied toward
Company matching contributions. Forfeitures aggregated $153,377 for the
year ended December 31, 1998.
Withdrawals - A participant may withdraw all or a portion of the value of
his or her after-tax contribution account or rollover account. The
withdrawal may not be more frequent than once every three months.
Upon attaining age 59-1/2, a participant may withdraw all or a portion of
his or her vested account balances. Additionally, a participant may
withdraw from his or her before-tax contribution account and Company
matching account, to the extent vested, for financial hardship. Generally,
these hardship withdrawals must be for at least $500 and may not be more
frequent than once every three months. Participant contributions to the
Plan will be suspended for 12 months after making a hardship withdrawal.
Loans - A participant may borrow from the vested portion of his or her
account. The minimum amount of any loan is $1,000. The maximum amount of
a loan is equal to the lesser of $50,000, or 50% of the vested value of
his or her account less any other outstanding loans. Only two loans are
permitted at a time. Loans are collateralized by the balance in the
participant's account.
Interest rates are determined by the plan administrator. For the year
ended December 31, 1998, interest rates were determined to be the prime
rate as of the first day of the month the loan is initiated, plus 1%.
Generally, the repayment period is not less than six months or more than
five years, except that a loan to purchase a primary residence may have a
term exceeding five years.
Administrative Expenses - Expenses incurred with respect to the
administration of the Plan are paid from the assets of the Plan to the
extent allowed under ERISA. To the extent such expenses are not paid by
the Plan, they are paid by the Company.
2. Summary of Significant Accounting Policies
Basis of Presentation - The accompanying financial statements of the Plan
have been prepared on the accrual basis of accounting in accordance with
generally accepted accounting principles.
Risks and Uncertainties - The Plan provides for various investment options
in any combination of stocks, bonds, fixed income securities, mutual funds
and other investment securities. Generally all investments are exposed to
various risks, such as interest rate, market and credit risks. Due to the
level of risk associated with certain investments and the level of
uncertainty related to changes in the value of investments, it is at least
reasonably possible that changes in risks in the near term could
materially affect participants' account balances, and the amounts reported
in the statement of net assets available for benefits and the statement of
changes in net assets available for benefits.
Use of Estimates - The preparation of financial statements in conformity
with generally accepted accounting principles requires management to make
significant estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosures of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
Valuation of Investments and Income Recognition - investments in guaranteed
investment contracts are stated at contract value, which approximates fair
value, as reported by the Trustee. The average yield for the Interest
Income Fund was 5.98% and 6.11% for 1998 and 1997, respectively. At
December 31, 1998 and 1997, the crediting interest rates of the investment
contracts ranged from 5.10% to 8.03% and 5.16% to 8.03%, respectively.
Generally, contract value represents contributions made under the
contract, plus interest at the contract rate, less funds used to purchase
annuities, withdrawals made pursuant to contract terms and administration
expenses charged by the companies entering into the contracts with the
Plan.
Investments in the Trustee's Magellan, Balanced, U.S. Equity Index, Asset
Manager, Asset Manager-Growth, Asset Manager-Income, Contrafund, Growth
and Income, Overseas, PIMCO Total Return Bond, and Low-Priced Stock Funds
are listed on an exchange and valued at the latest quoted market prices.
Investments in the Company's own stock are valued at the latest quoted
market prices.
Short-term investments are reflected at original cost. Accreted discount
on investments is included in interest income. The value of investments at
original cost plus the amount of accreted discount approximates fair
value.
Loans to participants are valued at cost which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on the accrual basis and dividends are
recorded on the ex-dividend date.
The Plan presents in the statement of changes in net assets available for
benefits, with fund information, the net appreciation (depreciation) in
the fair value of its investments, which consists of the realized gains or
losses and the unrealized appreciation (depreciation) on those
investments.
Participants are exposed to credit loss in the event of non-performance by
the Trustee or nonperformance by the companies in which the investments
are placed.
Set forth below are the major categories of investments at December 31,
1998 and 1997:
<TABLE>
1998 1997
----------------------------- -----------------------------------------
Per Per
Unit Shares Fair Unit Share Fair
Shares Value Value (a) Shares Value Value (a)
-------- -------- -------- ------- -------- --------
<S> <C> <C> <C> <C> <C> <C>
Interest Income Fund $54,010,239 $1.00 $54,010,239(b) 50,707,104 $1.00 50,707,104(b)
U.S. Equity Index fund 825,397 43.96 36,284,449(b) 786,379 34.98 27,507,535(b)
Balanced Fund 635,526 16.36 10,397,212(b) 526,667 15.27 8,042,212(b)
Magellan Fund 292,969 120.82 35,396,506(b) 253,521 95.27 24,152,973(b)
Asset Manager Fund 503,079 17.39 8,748,543 444,609 18.35 8,158,574(b)
Asset Manager-Growth Fund 750,695 18.68 14,022,977(b) 629,644 18.48 11,635,824(b)
Asset Manager-Income Fund 266,365 12.32 3,281,614 218,909 12.18 2,666,316
Saks Incorporated Stock Fund (c) 92,437 9.21 851,341 48,919 7.42 362,982
Contrafund 80,780 56.79 4,587,479 47,701 46.63 2,224,323
Growth & Income Fund 167,439 45.84 7,675,398 79,721 38.10 3,037,373
Overseas Fund 38,701 35.98 1,392,478 23,168 33 753,889
PIMCO Total Return Bond Fund 40,925 10.54 431,348
Low-Priced Stock Fund 11,532 22.85 263,502
---------- ----------
Total at fair market value $177,343,086 $139,249,105
============ ============
Total at cost $147,424,453 $122,342,595
============ ============
</TABLE>
(a) Reported at contract value with respect to GICs.
(b) Investments which represent more than 5% of net assets available
for benefits.
(c) The Saks Incorporated Stock Fund is measured in "Units" of participation
rather than in shares of Saks Incorporated common stock.
3. Guaranteed Investment Contracts
At December 31, 1998 and 1997, investments in GICs consisted of
the following:
<TABLE>
1998 1997
----------- -----------
<S> <C> <C>
Guaranteed investment contracts:
Combined Insurance (contract #CG-1040)
maturing on September 30, 1999, bearing interest at 6.22% $3,770,253 $3,549,476
Lincoln National (contract #GA 09596)
maturing on September 29, 1999, bearing interest at 5.16% 3,494,686 3,494,686
New York Life (contract #GA 30372)
maturing on March 31, 1999, bearing interest at 6.14% 4,852,968 4,572,233
Ohio National Life Insurance Company (contract #GA 5723)
maturing on March 31, 1999, bearing interest at 6.08% 2,663,810 2,511,134
Peoples Security Life (contract #BDA00562FR-00)
maturing on September 30, 1998, bearing interest at 6.10% 3,540,488
Principal Mutual (contract #41517701)
maturing on September 30, 1999, bearing interest at 8.03% 2,762,899 2,557,529
Sun Life of Canada (contract #S-0854-G)
maturing on September 30, 1999, bearing interest at 5.80% 3,456,864 3,267,357
Protective Life (contract #GA-1195)
maturing on September 30, 1998, bearing interest at 6.08% 2,780,478
------------ -----------
Total guaranteed investment contracts $21,001,480 $26,273,381
</TABLE>
Interest rates stated in connection with the GICs are net
of the annual rate charged for administrative expenses.
4. Short-Term Investments
At December 31, 1998 and 1997, short-term investments
consisted of the following:
<TABLE>
1998 1997
----------- -----------
<S> <C> <C>
Short-term investments:
Fidelity STIF (Cash Portfolio) open maturity, bearing interest at 5.10%
and 5.63% in 1998 and 1997, respectively $1,484,578 $1,472,506
Deutsche Bank ABS (DISCV932A/SAKS1) maturing on January 15, 1999
and 1998, bearing interest at 7.21% 1,040,726 2,467,293
Deutsche Bank ABS (CCT916/SAKS2) maturing on May 7 1997, bearing
interest at 7.20% 2,287,227
Fidelity Managed Income Portfolio II (633 GCSF) open maturity, bearing
interest at 6.13% in 1998 and 1997 23,237,638 10,904,856
Monumental Life ABS (BDA00201TR-02) maturing on February 16, 1999 and
February 18, 1998, bearing interest at 5.97% 2,473,261 2,481,729
Monumental Life ABS (BDA00201TR-04) maturing on January 15, 1999
and 1998, bearing interest at 5.97% 2,392,039 2,383,189
Monumental Life ABS (BDA00201TR-05) maturing on February 17, 1999 and
February 16, 1998, bearing interest at 5.69% 2,380,517 2,436,923
---------- -----------
Total short-term investments $33,008,759 $24,433,723
</TABLE>
5. Plan Termination
Although it has not expressed any intention to terminate the Plan, the
Company has the right to do so at any time subject to the provisions of
ERISA. In the event of the termination of the Plan, the account balances
of participants shall be nonforfeitable.
6. Form 5500
Any differences existing between the Form 5500 and the numbers included in
this report relate to accruals reflected in the financial statements and
amounts allocated to withdrawing participants on the Form 5500 for benefit
claims that were processed and approved for payment before December 31,
1998, but that had not yet been paid.
7. Tax Status
On September 22, 1995, the Company received a favorable determination
letter from the Internal Revenue Service as to the qualified tax-exempt
status of the Plan under Section 401(a) of the Code. This status exempts
the Plan from Federal income taxes. The plan administrator believes that
the Plan continues to qualify and operate in compliance with applicable
requirements of the Internal Revenue Code.
8. Related Party Transactions
Certain Plan investments represent shares in mutual funds or a short term
investment fund managed by Fidelity Management Trust Company, the Trustee,
which is, therefore, a party-in-interest. Fees paid by the Plan to the
Trustee for the investment-management and record-keeping services amounted
to $327,893 in 1998. The amount owed by the Plan to the Trustee at
December 31, 1998 and 1997 was $28,055 and $50,600, respectively.
Supplemental Schedules
Saks Fifth Avenue Retirement Savings Plan
Item 27a - Schedule of Assets Held for Investment Purposes
as of December 31, 1998
<TABLE>
<C> <C> <C> <C> <C>
c. Description of Investment Including Maturity
b. Identity Of Issuer, Borrower, Date, Rate of Interest, Collateral, Par, Or e. Curent
a. Lessor, Or Similar Party Marturity Value d. Cost (2) Value
- --- -------------------------------- ------------------------------------------ ----------- ---------
(1) Fidelity Magellan Fund Mutual Fund $25,291,056 $35,396,506(3)
(1) Fidelity U.S. Equity Index Fund Mutual Fund 21,598,557 36,284,449(3)
(1) Fidelity Balanced Fund Mutual Fund 9,032,381 10,397,212(3)
(1) Fidelity Asset Manager Fund Mutual Fund 8,340,967 8,748,543
(1) Fidelity Asset Manager-Growth Fund Mutual Fund 12,677,126 14,022,977(3)
(1) Fidelity Asset Manager - Income Fund Mutual Fund 3,122,258 3,281,614
(1) Saks Incorporated Common Stock Fund Unitized Stock Fund 777,819 851,341
(1) Fidelity Contrafund Mutual Fund 4,013,194 4,587,479
(1) Fidelity Growth & Income Fund Mutual Fund 6,543,972 7,675,398
(1) Fidelity Overseas Fund Mutual Fund 1,321,691 1,392,478
(1) Fidelity PIMCO Total Return Bond Fund Mutual Fund 443,415 431,348
(1) Fidelity Low-Priced Stock Fund Mutual Fund 251,778 263,502
----------- -----------
Total Fidelity Mutual Funds 93,414,214 123,332,847
----------- -----------
Combined Insurance #CG-1040 Guaranteed investment contract, matures
September 30, 1999 and bears interest at 6.22% 3,770,253 3,770,253
Lincoln National #GR6021 Guaranteed investment contract, matures
September 29, 1999 and bears interest at 5.16% 3,494,686 3,494,686
New York Life #GA30372 Guaranteed investment contract, matures
March 31, 1999 and bears interest at 6.14% 4,852,968 4,852,968
Ohio National Life #GA5723 Guaranteed investment contract, matures
March 31, 1999 and bears interest at 6.08% 2,663,810 2,663,810
Principal Mutual #41517701 Guaranteed investment contract, matures
September 30, 1999 and bears interest at 8.03% 2,762,899 2,762,899
Sun Life of Canada #S-0854-G Guaranteed investment contract, matures
September 30, 1999 and bears interest at 5.80% 3,456,864 3,456,864
----------- -----------
Total guaranteed investment contracts 21,001,480 21,001,480
----------- -----------
Various Short-Term Investments 33,008,759 33,008,759
----------- -----------
Total investments $147,424,453 $177,343,086
============= =============
Loans to participants:
Saks Fifth Avenue Retirement
Savings Plan participant loans $6,827,516 $6,827,516
============= =============
</TABLE>
(1) These assets held for investment purposes are held with a party-in-
interest.
(2) GICs are stated at contact value. Generally, the contract value and
cost of the GICs represent contributions made under the contract,
plus interest at the contract rate, less funds used to purchase
annuities, withdrawals made pursuant to contract terms and
administrative expenses charged by the companies entering into the
contracts with the Plan.
(3) Represents 5% or more of the net assets available for plan benefits.
Saks Fifth Avenue Retirement Savings Plan
Item 27d - Schedule of Reportable Transactions
for the year ended December 31, 1998
I. Single transactions exceeding 5% of assets.
NONE
II. Series of transactions involving property other than securities.
NONE
III. Series of transactions of same issue exceeding 5% of assets.
Schedule Attached
NOTE - Information required in columns e, f, and h is not applicable.
IV. Transactions in conjunction with same person involved in reportable single
transactions.
NONE
Saks Fifth Avenue Retirement Savings Plan
Item 27d (III) - Schedule of Reportable Transactions
for the year ended December 31, 1998
<TABLE>
<C> <C> <C> <C> <C> <C> <C> <C>
c. Purchases d. Sales
a. Identity Of b. Description ---------------------------------------- g. Cost of i. Net Gain
Party Involved Of Asset Price Number Price Number Asset (Loss)
- ------------------------ -------------- ------- ------- -------- ------- ----------- ---------
Fidelity Magellan Fund Mutual Fund $9,739,168 251 $5,509,815 246 * *
Fidelity Asset Manager-
Growth Fund Mutual Fund $4,790,480 240 $2,603,270 232 * *
U.S. Equity Index Fund Mutual Fund $8,852,043 252 $7,285,580 249 * *
Fidelity FMTC Institutional
Money Market Fund Money Market Fund $25,301,502 236 $25,393,820 254 $25,393,820 $0
Fidelity IPL Comingled Pool
Money Market Fund $12,609,672 236 $1,072,000 254 $1,072,000 $0
</TABLE>
* The historical cost of investments cannot be determined as
the information is not available from the ordinary business
records maintained by Fidelity Management Trust Company.
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the
Registration Statement on Form S-8 (File No. 333-66759) of Saks
Incorporated (formerly Proffitt's, Inc.) of our report dated June
25, 1999, relating to the financial statements of the Saks Fifth
Avenue Retirement Savings Plan, which appears in this Form 11-K.
/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Birmingham, Alabama
June 29, 1999
